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PVM Midday Report 05 May 2015

Published Tuesday, May 5th, 2015

Headlines

  1. Crude flows to east Libyan port of Zueitina halted due to protesters
  2. Iraq sends additional forces to fight off IS militants at the Beiji refinery complex
  3. Aramco in talks to buy 1.7 million bbls of gasoil to meet summer domestic demand
  4. European Commission raises bloc’s 2015 growth forecast to +1.5% from +1.3%
  5. UK construction PMI dips to 22-month low of 54.2 in April

Oil                                                                                              

Fundamentals: Libya’s eastern port of Zueitina has reopened but all crude flows from surrounding fields have been halted as a result of protesters demanding jobs, the latter of which has reduced the nation’s oil output to around 400,000 bpd. Baghdad has sent additional troops to its Beiji refinery as its forces struggle to contain attempts by IS militants to take over large sections of the complex. Meanwhile, sources have claimed that Saudi Arabia’s state-owned oil company Aramco is in talks to acquire 1.7 million bbls of gasoil for delivery later this month as it seeks to meet rising domestic fuel demand for the summer period.

Technicals: The dip this morning was muted and the contracts firmed as RBOB moved over the 200 day MA, at 203.75, again. This provided the signal for the rest to firm and the market is steady. There are targets higher to 61.22 WTI; 67.71 Brent; 203.11 Heat; and 611.00 Gasoil. RBOB looks like heading back to 206.05/18 whilst over 203. 75. The stochastics remain high and positive. They can stay high for a while looking dodgy but the market still go up. The contracts are all above the 5 day MAs and in this condition should head higher. Stick with the trend. It is not advised to be short.

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Posted by Stephen Brennock

Stephen Brennock joined PVM in 2013 after having worked as a project manager for a business development firm. He graduated with a degree in Business Management in 2007.